Prevailing wage law: Backers ask for public vote on repeal

David Eggert

Updated 10:00 am, Saturday, October 3, 2015

LANSING, Mich. (AP) — The best chance advocates have to save a Michigan law that promises better wages on public works projects is if Republican legislators ignore a petition initiative and instead let voters decide the fate of prevailing wage.

The 50-year-old statute requires workers on state-financed government construction projects to be paid local wage and benefit rates, which are based on union contracts. GOP Gov. Rick Snyder supports the law as a way to address a shortage of skilled tradespeople, prompting nonunion contractors and conservative donors who have pushed for its repeal to finance a citizen-initiated measure.

Assuming voter signatures that were turned in last month are certified, the Republican-controlled Legislature will have a window to pass the bill with no possibility of a veto. Right to Life of Michigan has successfully used the method four times to enact anti-abortion measures, most recently in 2013.

But defenders of the 1965 wage law, including many in the construction industry and Democrats, want lawmakers not to act so that the legislation goes to a statewide vote in November 2016.

"The vast majority of Michigan voters support prevailing wage policies. Let the public decide this important issue," said Herb Spence III, president and CEO of Spence Brothers, a construction company with offices in Saginaw, Ann Arbor and Traverse City. He recently gathered with fellow construction executives and union officials in Lansing to speak in favor of the law, warning that cost cutting will squeeze apprentice programs and other benefits provided under local agreements between trade unions and contractors.

About one-fifth of Michigan's construction workforce is unionized. But prevailing wages aid nonunion workers, too, particularly when they work on government projects, according to Patrick Devlin, secretary-treasurer of the nearly 100,000-member Michigan Building and Construction Trades Council union.

"We are building the next generation of construction workers out there," he said. "Lowering the pay scale for workers is not the way to attract, retain or grow a workforce. It simply doesn't work no matter what industry you're from."

Many states began passing prevailing wage measures after last century's Depression to prevent out-of-state companies from underbidding local employers on public jobs. The federal government has a similar wage law that covers federal projects.

Republicans say the law inflates costs for taxpayers and makes it harder for nonunion contractors to compete with lower bids.

The repeal effort has a lot of money behind it: Protecting Michigan Taxpayers, the ballot committee, reported raising $1 million as of mid-July for signature gathering and other expenses. Almost all of the money came from the nonunion Associated Builders & Contractors' legal and issue advocacy arm in Washington, D.C. ($310,000); ABC's Michigan chapter ($354,000); and the Michigan Freedom Fund, which has ties to Amway's founding DeVos family ($380,000).

The ballot committee opposing the repeal, Protect Michigan Jobs, reported raising no money as of mid-July but was formed weeks before that filing deadline.

The Senate, which passed a separate bill to repeal prevailing wage this year, is expected to approve the initiated legislation. Opponents are hopeful that the House, where Republicans' edge is narrower, may balk. However, Speaker Kevin Cotter has made scrapping the law a priority.

"We have the right under the constitution to make a choice," he said Thursday. "I think there's broad support within our caucus to make the change. If those votes are there, I plan to take the vote."